The Centre today claimed in the Delhi High Court that Sasan Power Ltd, a Reliance Power subsidiary, was seeking permission to mine more coal since it wanted to divert it to another power plant which was not permissible.
The submission, however, was opposed by the company's counsel saying there was no danger of diversion and everything was on documents and inspection was also being done by the government authorities.
Additional Solicitor General (ASG) Maninder Kaur Acharya told a bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar that it was hazardous to store more coal than the actual requirement, so they should mine coal and use it.
"We are not stingy. It's that they do not require more coal. As per the inspection, their requirement is 18 million tonnes per annum (MTPA) coal and we have granted permission for it. They should make out the case for asking one MTPA coal more, i.e. 19 MTPA," Acharya said.
The ASG was making submissions in response to the plea of the company seeking permission to mine coal from its two mines in excess of the 17 MTPA cap to enable it to run the 3,960 megawatt Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh.
"They (company) wants to divert the coal to another plant which is not permissible," she said.
Senior advocate Akhil Sibal, appearing for the company, contended that none of the other captive coal mines have this restriction and it was being singled out by the authorities.
He said there was no danger of diversion and everything was on documents and there was no stoppage in law. The counsel said there is oversight by the authorities on everything and questioned "why it was being squeezed like this".
The court, however, said it will monitor the situation on the coal consumption by the company and listed the matter for further hearing on March 21.
The Ministry of Coal, in its recent affidavit, told the court that through a letter of February 26, 2018, it has permitted Reliance Power, as an interim one-time measure, to produce 18 MTPA in excess of the cap of 17 MTPA.
The company was granted permission to produce additional 1 million tonne for the present financial year ending March 31.
The company, in its application, has contended that the mining of 17 MTPA of coal allowed from its two blocks Moher and Moher-Amlohri in the state was not enough to carry out operations till the end of this financial year.
Sasan Power has claimed that if it was not allowed to mine another two MTPA, that is up to 19 MTPA, in this financial year, it will not be able to meet the requirements of its UMPP that supplies electricity to 14 discoms in seven states including Delhi.
It has contended that in such a situation, the threat of a shutdown was looming large over the operation of the power project.
It has said the approved quantity of coal would not meet the requirement for running the plant for the last 10 days of March this year, severely affecting 42 crore consumers.
Such a situation will also entail a loss of around Rs 130 crore for the company, while the discoms would have to shell out more than Rs 200 crore to purchase power from other sellers, it has claimed.
The company has said it supplied electricity under a 25-year-long term power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.
In its application seeking permission to mine 19 MTPA, Sasan has contended that this will also help it to maintain additional stock of coal of 1.25 million tonne for meeting any exigency which might disrupt coal production.
The application was filed in the main writ petition by Reliance Power and Sasan challenging the Centre's May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.
The government had justified the cancellation, saying the unit's coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension.
Sasan project is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore, Reliance has said in its petition.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)